Revenue Note for Guidance

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Revenue Note for Guidance

652 Non-application of reliefs on replacement of assets in case of relevant disposals

Summary

This section provides that, subject to certain exceptions, roll-over relief under section 597, or the similar relief under section 605 for compulsory acquisitions, does not apply in the case of disposals of development land.

Details

Definitions

(2)(a) “relevant local authority” is the county council, corporation of a county or other borough, or urban district council in whose functional area the land is situated.

(3)(a) “assets of an authorised racecourse” are those assets of an authorised racecourse used for the functioning of that racecourse, and “authorised racecourse” has the same meaning as in section 2 of Irish Horseracing Industry Act, 1994.

(3A)(a) “greyhound race”, “greyhound race track” and “greyhound race track licence” have the same meanings as in section 2 of the Greyhound Industry Act, 1958.

(3A)(a) “assets of an authorised greyhound race track” are those assets of an authorised greyhound race track used for the functioning of that greyhound race track and “authorised greyhound race track” means a validly licenced greyhound race track.

Denial of roll-over relief and relief for compulsory acquisitions

(1) Subject to certain exceptions, a disposal of development land does not qualify for roll-over relief under section 597.

(4) Neither, subject to the exceptions provided for in subsection (5), does such a disposal qualify for the relief available under section 605 where land is disposed of by reason of a Compulsory Purchase Order (CPO).

Exceptions

(2)(b) The denial of roll-over relief does not apply in the case of a disposal of development land where a certificate is issued by the relevant local authority to state that the land being disposed of is subject to a use which is environmentally damaging as per guidelines issued by the Department of the Environment and Local Government.

(3)(b) The denial of roll-over relief does not apply in the case of a disposal of development land by an authorised race course if —

  • the asset being disposed of was an asset of the authorised racecourse throughout the period of 5 years ending with the disposal, and
  • the new assets acquired are also assets of an authorised racecourse.

(3)(c) Where a new asset ceases to be an asset of an authorised racecourse or it ceases to be used for the purposes of an authorised racecourse then the deferral of capital gains tax ceases.

(3A)(b) The denial of roll-over relief does not apply in the case of a disposal of development land by an authorised greyhound race track if —

  • the asset being disposed of was an asset of the authorised greyhound race track throughout the period of 5 years ending with the disposal, and
  • the new assets acquired are also assets of an authorised greyhound race track.

(3A)(c) Where a new asset ceases to be an asset of an authorised greyhound track or it ceases to be used for the purposes of an authorised greyhound race track then the deferral of capital gains tax ceases.

(3B) The denial of roll-over relief does not apply in respect of a disposal of development land which has been effected by an order under section 28 of the Dublin Docklands Development Authority Act, 1997. Under that Act the Minister for the Environment and Local Government may transfer, by order, land in the Dublin Docklands Area from a statutory body to the Dublin Docklands Development Authority.

(5)(b) The denial of the relief available under section 605 does not apply in the case of a disposal of land to a compulsory purchasing authority and the disposal is made under the CPO for the purposes of enabling that authority to construct, widen or extend a road or for a purpose connected with the construction, widening or extension of a road. The time frame within which reinvestment in replacement assets must be made is 2 years before and 8 years after the disposal in question. However, the time limits may be extended by the Revenue Commissioners where circumstances warrant such an extension. Relief may be given provisionally where an unconditional contract for the acquisition is entered into and all appropriate adjustments may be made by way of assessments (and without regard to the general time limits for making assessments) or repayments (notwithstanding the general time limit for making a claim for a repayment of tax in section 865) or discharge of tax when all the facts are known.

(6) The denial of roll-over relief and the denial of the relief available under section 605 does not apply in the case of the disposal of development land by bodies established for the sole purpose of promoting athletic or amateur games or sports where the disposal is made to further such activities of the body as are directed to that purpose.

Relevant Date: Finance Act 2021